• # What is the meaning of 250 % or certain % dividend?

Those companies who make profits pay a dividend to their shareholders every year or quarterly. The amount may vary according to the profit the company has made. I want to know what is the meaning of say 250 % or 300 % dividend? How exact Rs. per share is given to the shareholder?
• The meaning of say 250 % or 300 % dividend is 2.5 or 3 times to the face value of that company share. For example if the market value of some share say SBI is Rs.265 on NSE or BSE but its face value is Rs.10 then the dividend declared is 250%=10x2.5=25 rupees per share. It means you are going to get Rs.25 or 30/ share.If you have 100 shares of SBI, you will get 25x100=Rs. 2500 as dividend.
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• For declaring dividend the face value of a share is taken as basis. Suppose the face value of a share of company X is Rs 10. Let us assume you have about 200 shares of that company. It is immaterial whether you bought the shares in the market for Rs 15 per share or Rs 8 share.
Company will declare a closing date. All those shareholders whose name appear on the shareholders list as on closing date will get the eligible and declare dividend.

Suppose the company declares a dividend of 20 pr cent. That means one share of face value will be eligible for 10 X250% ,i.e Rs 25 per share.

So in the example if you hold 200 shares, you will be getting 25X 200= 5000 Rupees.

Not all companies give such high dividend. Whatever be the dividend percentage, the calculation is as given above. (However in the case of partly paid shares the dividend is calculated on the actual paid up value)

• Profitable companies want to keep the morals of the investors high enough so that the chain of trustworthiness between the two remains intact. To keep the investors motivated, there are a few premium companies who offer dividend to the extent of 250% or even higher say it may go beyond 300 %. Considering the face value of each share being Rs10 and the same may be treated as the base price equivalent to 100% and now arithmetically, we can calculate the dividend as follows -
100% is equal to Rs10
Hence 1% is equal to 10/ 100
Hence 250 % is equal to 10/100 multiplied by 250 which corresponds to Rs 25.
Supposing that an investor retains 100 share of the company, the dividend in that case would be Rs 25 multipled by 100 which corresponds to Rs 2500. Paying out such dividends to the investors would strengthen the good - will of the customers towards the company.

• 1. What is dividend? Dividend is the sharing of (part) profit of the company with the shareholders of the company.
2. A company generally declares dividend once or twice in a financial year.
3. It is not mandatory for a company to declare dividend. A company may decide to keep the entire profit with it and utilise it to increase the level of its operation or to diversify.
4. A loss-making company doesn't declare dividend.
5. Dividend is calculated on the face value of a share. Market value of a share doesn't have any bearing on the dividend declared.
6. However, whenever a company declares dividend, market value of its share increases. After disbursement of dividend (after the closing date), the market value of the share goes down to some extent.
7. Now 100% dividend means, if the face value of a share is Re. 1/-, a single share will bring a dividend of Re. 1/-. So, if a share-holder holds 1000 shares of the company of face value of Re. 1/- of each share, he/she will get a dividend of Re.1x1000=Rs. 1000/-.

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